Inspired by Efficiency Key Figures

HALF-YEAR REPORT 2014 INSPIRED BY EFFICIENCY KEY FIGURES

KEY FIGURES

01.01.– 01.01.– in CHF million, if not stated otherwise 30.06.2014 30.06.2013 Changes in %

Incoming orders / net sales Total incoming orders 172.9 170.6 1.3 Drives 56.0 54.6 2.6 Rollers 39.4 38.6 2.1 Conveyors & Sorters 33.5 26.1 28.4 Pallet- & Carton Flow 28.2 29.8 –5.4 Total net sales 157.1 149.1 5.3

Profitability EBITDA 18.2 21.4 –14.9 in % of net sales 11.6 14.4 EBITA 12.8 16.0 –20.2 in % of net sales 8.1 10.7 EBIT 8.8 13.1 32.8 in % of net sales 5.6 8.8 Result 7.1 10.5 –32.2 in % of net sales 4.5 7.1

Cash Flow Operating cash flow 5.0 17.6 –71.6 in % of net sales 3.2 11.8 Free cash flow 0 11.2 –100.0 in % of net sales 0 7.5

in CHF million, if not stated otherwise 30.06.2014 31.12.2013 Changes in %

Balance sheet Total assets 265.5 258.2 2.9 Net financial assets (-debts) 12.5 20.2 Equity 186.1 187.2 –0.6 Equity ratio (equity in % of assets) 70.1 72.5 Return on equity (in %) 7.6 11.9 CONTENTS

CONTENTS

About Interroll 4 Interroll on the capital market 5 Report by the Board of Directors and Group Management 6 Overview of financial position, earnings and cash flows 8 Overview by product groups 10 Overview by regions 13

Financial Statements of Interroll Group 15 Consolidated statement of financial position 15 Consolidated income statement 16 Consolidated statement of comprehensive income 17 Consolidated statement of cash flows 18 Consolidated statement of changes in equity 19

Notes to the consolidated financial interim statements 20 Basis of the consolidated financial statements 20 Segment information 22 Notes to the consolidated statement of financial position 23 Notes to the consolidated income statement 24 Notes to the consolidated statement of cash flows 25 Notes to the consolidated statement of changes in equity 25 Further disclosures and information 26

Imprint 27 Financial calendar 2015 27 Contact 27 ABOUT INTERROLL INTERROLL GROUP

ABOUT INTERROLL

Interroll Group is a worldwide leading provider of high- Interroll is engaged in global research projects on logistics quality key products and services for internal logistics. efficiency and actively supports industry associations The company offers a broad product range in the four prod- in developing standards. Headquartered in Sant’Antonino, uct groups “Rollers”, “Drives”, “Conveyors & Sorters” and Switzerland, Interroll operates a worldwide network of “Pallet & Carton Flow” to around 23,000 customers around 31 companies with around 1,800 employees. The company the world. was founded 1959. Since 1997, Interroll Group has been listed on the SIX Swiss Exchange and is included in the SPI index. Core industries are courier, parcel, express and postal services, airports, food processing as well as distribution centres. www.interroll.com Customers are amongst others well-known global brands such as Amazon, Bosch, Coca-Cola, Coop, DHL, FedEx, Peugeot, PepsiCo, Procter & Gamble, Siemens, Walmart or Yamaha.

Interroll product groups

Rollers Drives

Conveyors & Sorters Pallet & Carton Flow

4 INTERROLL GROUP INTERROLL ON THE CAPITAL MARKET

INTERROLL ON THE CAPITAL MARKET

International stock markets characterised Whereas some of the European stock markets only managed by volatility to move sideways, the Swiss stock market experienced solid The development of the stock markets during the first half growth in the first six months of 2014. The SMI Index rose by of 2014 was characterised by a volatile sideways movement. 4.3 % compared to its closing price on 31 December 2013. The crisis in Crimea and the resulting fear of a new East-West conflict, concerns over China’s growth prospects and signi Interroll share developed positively ficant devaluations in currencies in various emerging nations The Interroll share continued to show an upwards trend exerted enormous pressure on the capital markets at times. during the first half of 2014 following its extremely strong On the other hand, the successful placement of government performance in 2013. On 30 June 2014, it closed at a price bonds by the countries in crisis Ireland and Portugal, signals of CHF 525, which means it was 7.1 % higher than at the end from the European Central Bank (EZB) on further monetary of 2013. policy easing and the raising of the American limit on debt had positive effects on the stock markets. The Interroll share’s performance thus matched that of the SPI Index, which reached 8,456 points on 30 June 2014 and was thus 7.9 % higher than its year-end price of 7,838 points in 2013.

Share price performance Interroll vs. SPI /SXGE © Swissquote

20 % 590

15 % 565

10 % 540

5 % 515

0 % 490

–5 % 425 January February March April May June

Interroll share SPI/SXGE

5 REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

Dear Shareholders, Customers and Business Partners,

For Interroll, the financial year 2014 can be positively characterised by important projects and investments aimed at achieving sustainable growth and profitability. The economic climate remains challenging and we continue to see diverse regional developments in the global market for internal logistics solutions. In Europe, however, the mood among our customers has improved considerably since the middle of the second quarter.

We succeeded in continuing our current growth course in Kurt Rudolf the first six months of 2014. Our order intake increased from Chairman of the Board of Directors CHF 170.6 million in the first half of 2013 to CHF 172.9 million in 2014. Sales increased by a solid 9.1 % in local currency. In Swiss Francs, sales rose by 5.3 % in the first six months of 2014 to CHF 157.1 million (previous year: CHF 149.1 million). The first half of 2013 included a large one-time order placed by Red Bull in Thailand that was worth approximately CHF 6.5 million, however. If we were to leave this order from Red Bull out of the equation, we would have recorded a significantly higher order intake than last year.

Due to the good financial situation and solid balance sheet, we were able to drive two projects forward simultaneously from a position of strength in financial year 2014 in order to continue pursuing our growth strategy. On the one hand, we launched Paul Zumbühl our new modular conveyor platform in Europe. On the other CEO hand, we consolidated our plants in the USA. Both projects have a one-time impact on the result of our current financial year. The additional costs that can be considered an investment in our continued growth only represent a temporary short term burden on our earnings. Around two-thirds were already incurred in the first half of 2014.

Our EBITDA was therefore CHF 18.2 million (previous year: CHF 21.4 million) on 30 June 2014 and our EBITDA margin was at 11.6 % (previous year: 14.4 %). Earnings amounted to CHF 7.1 million (previous year: CHF 10.5 million).

6 REPORT BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT

With the launch of our new modular conveyor platform, we Interroll also took the next strategic step in gaining access have laid yet another important cornerstone on ensuring a to the Chinese market by opening a new Asian headquarters sustainably positive business development. This new concept in Shanghai in March 2014. Together with the regional offers our customers key advantages starting from faster Center of Excellence in Suzhou and the new plant in Shenzhen planning and installation of the system to up to 50 % shorter as production sites, we will extend the services we offer to delivery times, high flexibility and increased throughput, customers across Asia. We expect the demand for products but also energy savings and rapid return on investment. The and solutions in the area of intra-company logistics in feedback on the introduction of the new platform at CeMAT China to continue to grow sharply in the years to come. in Hanover in May 2014 was overwhelmingly positive. We will begin introducing it to the market in the fall of 2014 and We also strengthened our sales activities in Europe and now then launch the platform in the USA and China in 2015. serve the Portuguese market too with our own sales force. We expect our new platform to have a very positive effect on In the past, Interroll Spain served our customers here. Now, our sales in the medium term. they stand to benefit from direct, first-class service.

We decided to consolidate our companies in North America Our excellent performance, strong power of innovation and mainly for the following reasons: we acquired Portec, yet confidence in our business, but also our growth possibili- another company in the USA, in 2013 and we built up our ties are also reflected in our share’s development, which rose new regional Center of Excellence in Atlanta. We expect by 7.1 % in the first half of 2014. Interroll’s share price was to continue to see strong growth in North America. We will CHF 525 on 30 June 2014. continue to optimise our manufacturing. This called for us to close our two plants in Jeffersonville, USA, and Concord, We will continue to do everything we can to continue writing Canada, and bundle production at our regional Centres of Interroll’s success story this year too. With our clear focus Excellence in Wilmington and Atlanta. We are also planning on innovations, we will seek to meet the high demands that to expand our new Portec site in Cañon City, Colorado, into our customers place on key products and solutions in the a regional Centre of Excellence. The new regional Center of area of internal logistics and thus further extend our leading Excellence in Atlanta, a state-of-the-art production facility global market and technological position. for dynamic storage, modules and subsystems, was officially opened in March 2014. 160 enthusiastic customers attended We would like to thank all of our employees for their com- the opening event. This means we laid important milestones mitment in contributing to Interroll’s positive development. in the first half of 2014 on strengthening our position in the And we also thank our customers, suppliers, financiers and, North American market. of course, you, our dear shareholders, for your trust in our company. Interroll announced the acquisition of Pert Engineering in Shenzhen, China, on 1 July 2014. We gain direct sales access Sant’Antonino, 8 August 2014 for our high-quality belt curves and other internal logistics solutions in China through this acquisition. The Pert production site employs 60 experienced people, holds a leading position and specialises in serving airports, distribution and logistics customers in the Asia-Pacific region. With this Kurt Rudolf Paul Zumbühl acquisition, we are continuing to execute on our strategy Chairman of the Board of Directors CEO Chief Executive Officer of pursuing further growth in the area of belt curves. We already took the first step by acquiring Portec in the USA in 2013.

7 OVERVIEW OF FINANCIAL POSITION, EARNINGS AND CASH FLOWS

OVERVIEW OF FINANCIAL POSITION, EARNINGS AND CASH FLOWS

Significant events for business development In local currency, we managed to increase our order intake On 1 July 2014, we announced the acquisition of Pert Engi- by 4.5 % and our sales by a very good 9.1 %. neering in Shenzhen, China. The company is a market leader and specialises in serving airport, distribution and logistics The growth in order intake and sales can be attributed to customers in the Asia-Pacific region. The acquisition of our organic growth in sales as well as successful integration of previous joint venture partner, who was a licensed manufac- Portec, the company we acquired in the USA. turer of Portec belt curves, gives us direct sales access for our high-quality belt curves and other internal logistics solutions Results burdened by investments in China. The company reported sales of around USD 4 mil- in future growth lion in 2013. Through this acquisition, we are continuing In the first half of 2014, we made significant future-oriented to implement our strategy of further internationalisation and investments that incurred exceptionally one-time expenses. growth in the area of belt curves. Due to our solid financial situation, we pushed consolidation of our companies in North America as part of our acquisi- Continued positive development of order intake tion of Portec Inc. as well as the new Center of Excellence in and sales Atlanta. This together with the development of our new In the first six months of 2014, order intake increased to modular conveyor platform had a negative one-time impact CHF 172.9 million (2013: CHF 170.6 million). Sales reached on our results for the first half of the year. CHF 157.1 million and thus rose by 5.3 % compared to the 2013 reporting period, which was already quite strong For this reason, our profit before interest, taxes, depreciation (CHF 149.1 million). The previous year’s figures included and amortisation (EBITDA) was CHF 18.2 million in the first the large one-time order we received from Red Bull Thailand half of 2014 (previous year: CHF 21.4 million). Our EBITDA worth approximately CHF 6.5 million. margin was 11.6 % (previous year: 14.4 %).

Order intake Net sales

170.6 172.9 157.1 166.3 147.4 149.1 153.0 144.6 136.8 137.2

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

8 OVERVIEW OF FINANCIAL POSITION, EARNINGS AND CASH FLOWS

Earnings before interest and taxes (EBIT) was CHF 8.8 mil- EBITDA lion in 2014 compared to CHF 13.1 million in 2013. The EBIT margin in 2014 was 5.6 % following 8.8 % in 2013. The 21.4 20.5 19.6 reporting period 2014 includes additional amortisation from 18.2 the acquisition of the patents and customer assets of the 15.2 2013 acquired company Portec of nearly CHF 0.9 million.

Compared to last year’s result of CHF 10.5 million, this year’s result was CHF 7.1 million. 2010 2011 2012 2013 2014 Balance sheet reflects growth and acquisition The balance sheet increased as of 30 June 2014 to CHF 265.5 million and was thus 2.9 % higher than the value at the end of 2013 (CHF 258.2 million). This increase can be attributed to EBIT various inward stock movements and additional assets. 13.2 13.1 Equity amounted to CHF 186.1 million on 30 June 2014 11.6 and was thus slightly lower than it was on 31 December 2013 8.8 7.5 (CHF 187.2 million). This mainly resulted from the distri bution out of reserves from capital contributions that was approved at the Annual General Meeting in May 2014. The equity ratio was thus 70.1 % compared to 72.5 % on 31 December 2013. 2010 2011 2012 2013 2014

Continued positive free cash flow We generated an operating cash flow of CHF 5.0 million in the first six months of 2014. The decline compared to Result the previous year’s period can mainly be attributed to lower earnings and increased current assets. 10.5 9.9 9.5

The investments in future growth of CHF 6.2 million were 7.1 mainly related to our new plant in Atlanta, expansion 5.3 and modernisation of our machinery, and the SAP project. We were able to generate free cash flow of CHF 0.03 million in the first half of 2014. 2010 2011 2012 2013 2014

9 OVERVIEW BY PRODUCT GROUP

OVERVIEW BY PRODUCT GROUP

Product group “Drives” The product group Drives continued its successful growth by 2.6 % to CHF 56.0 million in the first half of 2014 (2013: CHF 54.6 million). Order intake increased by 2.6 % from CHF 55.4 million to CHF 56.9 million. In local currency the order intake was substantially higher. A variety of different factors contributed to this positive development.

The trend towards greater flexibility and higher energy savings with conveyors remains intact and has a positive effect on our sales in the area of RollerDrives. Here we are the only vendor that offers a broad 24 volt RollerDrive product portfolio that ranges from RollerDrives and control systems to complete modular solutions for easy installation. Sustainability also plays an increasingly important role for our customers. Our Interroll Multiprofile contributes to higher flexibility, reduction of energy-saving RollerDrives are not only ideal for installation at maintenance and retrofit times and lower storage. new facilities, but also for so-called retrofitting. We offer our customers the chance to either switch over to a new system at once or to gradually implement our new technology. In Europe, our drum motors are used among others by the Italian global market leader in the area of packaging and The renowned company Villeroy & Boch’s high-bay warehouse sealing machines, G. Mondini Spa. To date we have already in Merzig, Germany, is an excellent example. We started shipped 20,000 drum motors to this customer and always switching their commissioning system over to RollerDrives meet its strict demands for quality and offer fast service from about seven years ago and in the meantime have converted Interroll all over the world. several of the individual commissioning zones over from the old 400 volt system to our 24 volt drives. Approximately 30 % In the USA, our drum motors have received certification and energy savings have been achieved and the speed has increased approval by the US Department of Agriculture (USDA). Our by roughly the factor of 10 with this new system. drum motor is thus one of the few that meets the hygiene regulations on the construction and manufacturing of devices We continued our development efforts in the area of used to process milk products and thus the strict regulations drum motors and managed to reduce the noise level of our on food safety and processing. With an average growth rate synchronous drum motors. The newly developed Interroll of around 9 % in the years to come, we feel the food market in Multiprofile also offers our customers significant benefits the USA will offer attractive potential for acquiring more new such as increased flexibility, a reduction in the maintenance customers in the future. and retrofit times and lower storage. Interroll Multiprofile is manufactured using yet another new development, the We have also worked on further optimising our processes “Interroll Premium Hygienic PU,” a hygiene-friendly material and on our production layout at our Centre of Excellence that complements our product portfolio that meets European for drum motors in Baal, Germany. This translates into even hygiene regulations (EHEDG). faster delivery times for our customers.

10 OVERVIEW BY PRODUCT GROUP

Product group “Rollers” Product group “Conveyors & Sorters” We are seeing a positive development in our product group The product group Conveyors & Sorters managed to top last Rollers. We posted sales of CHF 39.4 million which were thus year’s high sales figure, due to the acquisition of Portec among 2.1 % higher than the previous year’s figure of CHF 38.6 mil- other things, and reported sales of CHF 33.5 million, an lion. We managed to increase order intake rather significantly impressive 28.4 % higher than in the first six months of 2013 from CHF 38.8 million in the first half of 2013 to an encour- (CHF 26.1 million). Order intake in 2014 was CHF 47.8 million aging CHF 41.1 million in 2014 (+ 6.0 %). compared to CHF 39.0 million in 2013 (+ 22.7 %).

The 500 million conveyor rollers we manufactured until today The trend toward automation driven mainly by e-commerce make us the global market leader in this area. Our partners and ergonomics in the working environment continues. also appreciate us because of our quick delivery times and Trading companies are demanding both flexibility and speed. good quality and we have been realising outsourcing projects for years. In fact, we also realised this type of outsourcing We received lucrative orders for our sorters from Asia-Pacific. project for an important customer in the first half of 2014. The Chinese Post with whom we were already working together successfully placed another order for several sorters. We continue to offer our customers the chance to plan our Furthermore, we installed new conveyor technology at rollers in their own layout by using our Interroll configura- Alfamart, Indonesia’s largest retailer, for the ninth time and tor software. Through our platform we are able to produce equipped the new distribution centre in Karawang with 60,000 different roller variants on the basis of considerably conveyors. We also successfully installed a cross belt sorter lower raw material. This software is being received very posi- that sorts around 50,000 shipments per day at City-Link tively by the market. And understandably so, because it helps Express, an international provider of courier services based save a lot of time in planning a system. in Malaysia.

Our new modular conveyor platform, which we introduced to a global audience for the first time in May 2014 at CeMAT in Hanover, will be launched in Europe starting in the fall of 2014. The launch in the USA and China will follow in 2015. In the medium term, we expect this innovative platform to have a very positive impact on sales. This area offers great outsourcing potential and meets with considerable interest among our customers. New applications can be supported due to our flexibility and much shorter delivery times.

Paul Zumbühl, CEO Interroll Worldwide Group, and Michael Kuhn, Managing Director Interroll Automation Sinsheim, introduce the new Modular Conveyor Platform to an international press audience.

11 OVERVIEW BY PRODUCT GROUP

Product group “Pallet & Carton Flow” The development of sales and order intake this year in the Pallet & Carton Flow product group is significantly influenced by the order that Red Bull Thailand placed in the first half of 2013 worth around CHF 6.5 million. This large, one- time order therefore distorts the picture somewhat.

For this reason, sales of CHF 28.2 million were somewhat lower than in the same period last year (2013: CHF 29.8 million). Order intake dropped from CHF 37.5 million to CHF 27.2 million. Besides, several projects were rescheduled in Southeast Asia.

We are seeing high demand for our dynamic storage solutions in North America. For example, for the first time ever, we received an order valued at more than CHF 1 million from an important German manufacturer in the area of laundry & home care in Mexico through a local partner. The introduction of the new Modular Conveyor Platform at CeMAT Sales in the area of Pallet & Carton Flow in North and South generated large interest with the international visitors. America rose by very good 21.8 % in the first half of 2014.

We installed our Versi-Flow System at Pick n Pay, the most We are also very successful in Germany with our dynamic important retailer in Africa, in close cooperation with the storage solutions and are now a service partner for a large filler SABMiller back at the beginning of 2014. Interroll Ver- American manufacturer of soft drinks. And in France, we si-Flow, an economical, versatile product from the product received an order from a large Swedish furniture chain to family Carton Flow, is based on the First In-First Out system equip 30 warehouses with our Versi-Flow system following an (FIFO) and guarantees faster access to the products stored intensive and successful test phase. and ergonomically better storage and goods issue. This opti- mises retailers’ work processes. Thanks to our new cooperation partner Trading House “Kifato MK” in Russia, we will be able to tap into this market much better in the future. Trading House “Kifato MK” Sales by product groups already has a strong market position; therefore we will be able to selectively expand our sales capacities there.

Drives 36 % Rollers 25 % Conveyors & Sorters 21 % Pallet & Carton Flow 18 %

12 OVERVIEW BY REGION

OVERVIEW BY REGION

Different developments in the three operative regions We have continued to pursue our internationalisation strategy by entering into new markets and acquiring new customers. And, in fact, business developed positively in all three regions, EMEA (Europe, the Middle East and Africa), the Americas and Asia-Pacific.

Positive trend characteristic of development in the EMEA region Whereas sales in the EMEA region declined by 5.7 % in financial year 2013, our sales in the first half of 2014 were Small customer groups visit the new Center of Excellence in Atlanta virtually stable at CHF 101.0 million compared to 2013 during the grand opening. (CHF 102.4 million). Our customers were in a much better mood in the second quarter of 2014 and we expect this to have a positive effect on order intake in the second half of Sales develop very positively in the Americas 2014 and in 2015. Sales growth of 27.6 % in the Americas during the first half of 2014 can for the most part be attributed to the acquisition Sales in the various European regions continued to develop of Portec in July 2013. Sales in the first six months of 2014 at different paces. Due to investments in logistics projects amounted to CHF 37.1 million compared to CHF 29.0 million that were overdue in France, Germany and Spain, we in 2013. managed to increase sales in these countries by an average of 5 %. Growth in Scandinavia even exceeded 10 %. Our The first half of 2014 was characterised by the consolidation companies in Italy and Turkey also developed extremely of our companies in North America and the start-up phase at positively. In fact, the Italian company we opened in 2013 our new regional Center of Excellence in Atlanta. We closed was already able to obtain interesting orders in the area of our plants in Jeffersonville, USA, and Concord, Canada, and «Conveyors & Sorters». bundled manufacturing at our regional Centers of Excellence in Wilmington and Atlanta. In addition, we are planning By establishing our own sales in Portugal, we will be able to expand our Portec site in Cañon City into a regional Center to serve this market directly in the future. The main focus of Excellence. here will be on the areas food processing, e-commerce, postal and package services, as well as security and logistics at airports.

13 OVERVIEW BY REGION

In Brazil, we are experiencing an above average development including extremely interesting customer projects that are now in planning. For this reason, we expect to see our business continue to develop positively.

Sales in the Asia-Pacific region continue to rise The Asia-Pacific region continues to be of great importance to our growth potential. With the improvement in living standards in the emerging nations here, demand for our products will continue to increase and thus the demand for the appropriate internal logistics solutions. In 2014, sales rose by 7.3 % to CHF 19.0 million. Sales were CHF 17.7 mil- Inauguration of the new Asia headquarter in Shanghai by Dr. Ben lion the year before and included a major one-time order Xia, Executive Vice President Asia (middle) and Mike Wang, General Manager Sales Interroll China (right) from Red Bull in Thailand that was worth roughly CHF 6.5 million.

Compared to the same period of the previous year, our In addition, on 1 July 2014 we signed a definitive agreement sales in China rose by approximately 61 %. And we are also to acquire Pert Engineering in Shenzhen, China, which seeing an extremely positive development in Japan and will most likely be concluded by the beginning of August Australia. 2014. The company is a market leader in Asia in the area of belt curves and this will give us direct access to its exist- Southeast Asia clearly failed to meet our expectations due to ing customers, particularly in the area of express package the fact that several projects were rescheduled. On the other deliveries and baggage handling systems. hand, we received several highly promising inquiries from Indonesia and the Philippines. Shenzhen is our fourth site in China next to Suzhou, Hong Kong and Shanghai and represents yet another con- We continued to pursue our growth strategy in Asia-Pacific sequent execution of our strategy of offering our more in 2014. In March 2014, we celebrated the official opening than 23,000 customers around the world our global product of our new Asian headquarters in Shanghai. Together with portfolio more quickly by strengthening our local manu the regional Center of Excellence in Suzhou, we will speed facturing. up Interroll’s expansion in China from here and offer our Asian customers even better service. We expect the continued boom in market segments such as e-commerce and food processing in China to result in a steady increase in demand in the area of internal logistics solutions. E-commerce sales in China have at least doubled over the last five years to more than 1 trillion Yuan (circa CHF 145 billion) in 2013.

14 INTERROLL GROUP STATEMENT OF FINANCIAL POSITION

1 FINANCIAL INTERIM STATEMENTS OF INTERROLL GROUP

1.1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

in thousands CHF 30.06.2014 in % 31.12.2013 in %

ASSETS

Property, plant and equipment 82,012 83,266 Intangible assets 49,579 53,054 Financial assets 703 732 Deferred tax assets 3,642 3,387 Total non-current assets 135,936 51.2 140,439 54.4 Inventories 42,571 38,119 Current tax assets 1,040 706 Trade and other accounts receivable 68,042 58,164 Cash and cash equivalents 17,934 20,797 Total current assets 129,587 48.8 117,786 45.6 Total assets 265,523 100.0 258,225 100.0

EQUITY AND LIABILITIES

Share capital 8,540 8,540 Share premium 6,415 13,740 Reserve for own shares –1,260 –1,641 Translation reserve –46,092 –45,454 Retained earnings 218,206 211,915 Non-controlling interests 261 145 Total equity 186,070 70.1 187,245 72.5 Financial liabilities 253 253 Deferred tax liabilities 4,555 5,071 Pension liabilities 3,995 2,824 Provisions 6,106 5,902 Total non-current liabilities 14,909 5.6 14,050 5.4 Financial liabilities 5,224 320 Current tax liabilities 7,232 9,831 Trade and other accounts payable 52,088 46,779 Total current liabilities 64,544 24.3 56,930 22.1 Total liabilities 79,453 29.9 70,980 27.5 Total liabilities and equity 265,523 100.0 258,225 100.0

15 CONSOLIDATED INCOME STATEMENT INTERROLL GROUP

1.2 CONSOLIDATED INCOME STATEMENT

Jan. – Jun. Jan. – Jun. in thousands CHF 2014 in % 2013 in % Variance in %

Net Sales 157,068 100.0 149,138 100.0 7,930 5.3

Material expenses –67,956 –43.3 –60,552 –40.6 Personnel expenses –50,551 –32.2 –45,526 –30.5 Increase / (Decrease) in work in progress, Finished products and own goods capitalised 3,194 2.0 805 0.5 Other operating expenses –28,271 –18.0 –26,627 –17.9 Other operating income 4,756 3.0 4,206 2.8 Operating result before depreciation and amortisation (EBITDA) 18,240 11.6 21,444 14.4 –3,204 –14.9

Depreciation –5,471 –3.5 –5,445 –3.7 Operating result before amortisation (EBITA) 12,769 8.1 15,999 10.7 –3,230 –20.2

Amortisation –3,981 –2.5 –2,922 –2.0 Operating result (EBIT) 8,788 5.6 13,077 8.8 –4,289 –32.8

Financing expenses –220 –0.1 –476 –0.3 Financing income 371 0.2 47 0.0 Financing result 151 0.1 –429 –0.3 580 –135.2

Result before income taxes 8,939 5.7 12,648 8.5 –3,709 –29.3

Income tax expense –1,793 –1.1 –2,102 –1.4 Result 7,146 4.5 10,546 7.1 –3,400 –32.2

Result attributable to: – Non-controlling interests 116 0.1 – Owners of Interroll Holding Ltd. 7,030 4.5 10,546 7.1 –3,516 –33.3

Earnings per share (in CHF) Non-diluted earnings per share 8.27 12.95 –4.68 –36.1 Diluted earnings per share 8.27 12.87 –4.60 –35.7

16 INTERROLL GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1.3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Jan. – Jun. Jan. – Jun. in thousands CHF 2014 2013

Result 7,146 10,546

Other comprehensive income Items that will not be reclassified to income statement Remeasurements of pension liabilities –933 1,102 Income tax on items that will not be reclassified 185 –226 Total items that will not be reclassified to income statement –748 876

Items that may be reclassified subsequently to income statement Currency translation differences –629 3,115 Income tax on items that may be reclassified Total items that may be reclassified subsequently to income statement –629 3,115

Other comprehensive income –1,377 3,991

Comprehensive income 5,769 14,537

Result attributable to: – Non-controlling interests 116 – Owners of Interroll Holding Ltd. 5,653 14,537

17 CONSOLIDATED STATEMENT OF CASH FLOWS INTERROLL GROUP

1.4 CONSOLIDATED STATEMENT OF CASH FLOWS

Jan. – Jun. Jan. – Jun. in thousands CHF 2014 2013

Result 7,146 10,546

Depreciation, amortisation and impairment 9,452 8,368 Loss / (gain) on disposal of tangible and intangible assets –633 –14 Financing result –151 429 Income taxes 1,793 2,102 Changes in inventories –3,962 –8,269 Changes in trade and other accounts receivable –10,670 –2,657 Changes in trade and other accounts payable 5,483 9,188 Changes in provisions 329 567 Income taxes paid –5,313 –4,118 Personnel expenses on share-based payments 926 899 Other non-cash (income)/expenses 626 524 Cash flow from operating activities 5,026 17,565

Acquisition of property, plant and equipment –5,492 –4,953 Acquisition of intangible assets –662 –979 Acquisition of financial assets –18 –645 Proceeds from disposal of property, plant and equipment 1,074 129 Proceeds from disposal of intangible assets 2 Settlement of loans receivable 44 4 Interests received 60 47 Cash flow from investing activities –4,994 –6,395

Free cash flow 32 11,170

Distribution from reserves from capital contributions –7,494 –6,520 Acquisition of own shares –375 Disposal of own shares 4,418 Proceeds from financial liabilities 4,970 114 Repayment of financial liabilities –52 –347 Interests paid –47 –70 Cash flow from financing activities –2,998 –2,405

Translation adjustment on cash and cash equivalents 103 –63 Changes in cash and cash equivalent –2,863 8,702

Cash and cash equivalent at 1 January 20,797 14,109 Cash and cash equivalent at 30 June 17,934 22,811

18 INTERROLL GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

1.5 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

RESERVE NON- SHARE SHARE FOR OWN TRANSLATION RETAINED CONTROLLING in thousands CHF CAPITAL PREMIUM SHARES RESERVE EARNINGS INTERESTS TOTAL EQUITY

Balance at 1 January 2013 8,540 20,427 –17,670 –44,319 190,659 157,637 Result 10,546 10,546 Other comprehensive income, net of taxes 3,115 876 3,991 Comprehensive income 3,115 11,422 14,537 Distribution from reserves from capital contributions –6,520 –6,520 Share-based payments –106 1,005 899 Sales of own shares incl. tax effects –34 4,455 4,421 Balance at 30 June 2013 8,540 13,767 –12,210 –41,204 202,081 170,974 Balance at 31 December 2013 8,540 13,740 –1,641 –45,463 211,924 145 187,245 Result 7,030 116 7,146 Other comprehensive income, net of taxes –629 –748 –1,377 Comprehensive income –629 6,282 116 5,769 Distribution from reserves from capital contributions, net –7,494 –7,494 Share-based payments 169 756 925 Purchase of own shares incl. tax effects –375 –375 Balance at 30 June 2014 8,540 6,415 –1,260 –46,092 218,206 261 186,070

19 NOTES TO THE CONSOLIDATED FINANCIAL INTERIM STATEMENTS INTERROLL GROUP

2 NOTES TO THE CONSOLIDATED FINANCIAL INTERIM STATEMENTS

2.1 BASIS OF THE CONSOLIDATED FINANCIAL STATEMENTS

Convention of preparation The condensed, unaudited consolidated interim financial statements at 30 June 2014 have been prepared in accordance with IAS 34 («interim period») and are based on the uniform financial statements of Interroll Holding LTD. and its subsidiaries («the Group»). All statements are prepared based on uniform Group accounting principles. This interim statement reflects an update of previously published information. There- fore, it should always be read in conjunction with the annual report 2013. The interim statements were approved by the Board of Directors on 24 July 2014.

The Interroll Group has adopted the amendments of the IASB in the standards and interpretations (IAS 39, IAS 32, IFRIC 21 and the annual improvement project) that came into effect at 1 January 2014. IAS 36 was adopted early on at 1 January 2013. There was no significant impact on the disclosure and reporting of this interim statement from the adoption of the new and amended standards and interpretations.

Foreign currency translation The following most important exchange rates were used for the translation of financial statements denominated in foreign currencies:

INCOME STATEMENT BALANCE SHEET (AVERAGE RATES) (YEAR END RATES)

Jan. – Jun. Jan. – Jun. Change 30. Jun. 31. Dec. Change 2014 2013 in % 2014 2013 in %

1 EUR 1.219 1.229 –0.8 1.216 1.228 –1.0 1 USD 0.889 0.938 –5.2 0.890 0.890 0.0 1 CAD 0.811 0.917 –11.6 0.833 0.837 –0.4 1 GBP 1.488 1.440 3.4 1.517 1.472 3.0 1 SGD 0.706 0.753 –6.2 0.713 0.705 1.1 1 CNY 0.144 0.152 –5.3 0.144 0.147 –2.4 1 PLZ 0.292 0.292 0.0 0.292 0.296 –1.0 1 THB 0.027 0.031 –13.1 0.027 0.027 0.7 1 ZAR 0.083 0.100 –17.0 0.084 0.084 –0.2

New or amended IAS/IFRS standards and interpretations The IASB has published new and revised standards and interpretations. These come into force later than 1 July 2014 and are not early adopted in this financial statement. The impact of the introduction/amendment of IFRS 9 (Financial Instruments), IFRS 11 (Joint Arrangements), IFRS 15 (Revenue Recognition) and IAS 19 (employee benefits) cannot yet be assessed with sufficient certainty or the expectations of the impact is in line with the disclosures made in the annual report 2013. Based on a first assessment, with the exception of IFRS 15, the Group Management does not expect significant impacts on the consolidated financial statements from these standards and interpretations.

20 INTERROLL GROUP NOTES TO THE CONSOLIDATED FINANCIAL INTERIM STATEMENTS

Critical accounting estimates and judgements The preparation of the consolidated interim financial statements requires management to make estimates, assumptions and judgements for the determination of income, expenses, assets, liabilities and for the disclosure of contingent liabilities. Such estimates, which are based on the management‘s best knowledge and belief at the reporting date, may deviate from actual circumstances. In such a case, they will be modified as appropriate in the period in which the circumstances change.

Segment reporting The Interroll Group consists of one single business unit. The complete product range is sold in all markets through the respective regional sales organisation. The customer groups being OEMs, system integrators and endusers are taken care of by tailor-made product offerings and differentiated consulting levels. The Interroll manufacturing units focus on the production of specific product ranges. Assembly units receive semi-finished products from the manufacturing units and assemble a wide product range to serve their local markets. The Interroll Research Center, which is centrally located, develops new application technologies and new products for all product groups. Centers of Excellence which focus on specific product groups, con- centrate on the development of their assigned product portfolio.

The Group Management and the whole Interroll management structure are organized by functions (Overall Management, Products & Technology, Global Sales & Services, Marketing and Finance). The financial management of the Group by the Board of Directors is effected on one hand by turnover of the product groups and geographical markets and on the other hand by the reporting of the consolidated financial statements. The Group Management additionally assesses the achievement of financial and qualitative targets of all legal entities.

Financial instruments Interroll Group has only financial instruments classified as hierarchy 2 in line with IFRS 13. These financial instruments include only foreign currency forward contracts. The valuation in hierarchy 2 is based on factors which cannot be tracked to actively listed prices on public markets. Instead, they can be monitored directly (as a price) or indirectly (as a derivative of the price). The amount of the financial instruments classified as hierarchy 2 is CHF 0.0 million at 30 June 2014 (31 December 2013: CHF 0.2 million).

21 NOTES TO THE CONSOLIDATED FINANCIAL INTERIM STATEMENTS INTERROLL GROUP

2.2 SEGMENT INFORMATION

Net sales by geographical markets Turnover by product groups according to geographical markets is presented as follows:

Jan. – Jun. Jan. – Jun. in thousands CHF 2014 in % 2013 in %

Other Europe, Middle East, Africa 73,412 46.7 68,306 45.8 Germany 25,770 16.4 32,124 21.5 Switzerland 1,854 1.2 1,951 1.3 Total Europe, Middle East, Africa 101,036 64.3 102,381 68.6 USA 30,126 19.2 23,377 15.7 Other Americas 6,949 4.4 5,671 3.8 Total Americas 37,075 23.6 29,048 19.5 Asia incl. Australia 18,957 12.1 17,709 11.9 Total Asia-Pacific 18,957 12.1 17,709 11.9 Total Group 157,068 100.0 149,138 100.0

Material turnover with specific customers Turnover is realised with more than 10’000 active customers. There is no customer achieving a turnover of more than five per cent of Group sales.

Turnover by product group Turnover realised in the first half year by product group is presented as follows:

Jan. – Jun. Jan. – Jun. in thousands CHF 2014 in % 2013 in %

Drives 55,988 35.7 54,598 36.6 Rollers 39,390 25.1 38,623 25.9 Conveyors & Sorters 33,498 21.3 26,068 17.5 Pallet & Carton Flow 28,192 17.9 29,849 20.0 Total Group 157,068 100.0 149,138 100.0

22 INTERROLL GROUP NOTES TO THE CONSOLIDATED FINANCIAL INTERIM STATEMENTS

2.3 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Consolidated statement of financial position Total assets increased compared to year end 2013 by CHF 7.3 million. Particularly due to an increase in accounts receivable, the net working capital increased by CHF 4.2 million to CHF 65.0 million. During the period under review trade and other accounts payable increased by CHF 5.3 million to CHF 52.1 million.

Investments / capital expenditures Total CHF 6.2 million in gross capital expenditures were invested. Non-current assets reached CHF 135.9 million. Capital expenditure into intangible assets in essence are for the further development of SAP.

In line with IAS 36, goodwill and other intangible assets are subject to an annual impairment test. These tests are normally performed in the second half of the year. Currently, no evidence exists for impairments.

Net financial assets Net financial assets at end of the reporting period decreased by CHF 7.8 million compared to year end 2013 and reached CHF 12.5 million by 30 June 2014.

Total credit lines available at end of the reporting period amount to CHF 79.4 million, of which CHF 74.2 million remain unused (end of 2013: CHF 80.6 million). From these credit lines, CHF 40.0 million are committed until first half 2015.

The debt covenants that have not been changed since year end 2013 have always been complied with during the interim period as well as during the previous year period.

Equity Equity decreased by CHF 1.2 million to CHF 186.1 million compared to the previous year end. The distri bution of reserves from capital contributions of net CHF 7.5 million took place on 17 May 2014 and has been debited accordingly to the equity. The equity ratio at end of the interim period corresponds to 70.1 % (year end 2013: 72.5 %).

23 NOTES TO THE CONSOLIDATED FINANCIAL INTERIM STATEMENTS INTERROLL GROUP

2.4 NOTES TO THE CONSOLIDATED INCOME STATEMENT

Net sales Net sales in reporting currency have increased by 5.3 % to CHF 157.1 million compared to the previous year‘s period. Excluding negative foreign currency effects of 3.8 % the increase would have been 9.1 % in local currencies. About half of the increase is driven by the Portec acquisition. On the one hand side, the negative currency effects result from dollar areas (mainly USA, Canada and Australia) and on the other hand side from emerging market countries (mainly Turkey, South Africa, Thailand and Brasil). Organic growth expressed in local currency reached 4.2 %.

Earnings before interest and taxes (EBIT) The development of the new modular conveyor platform in Germany and the reorganisation of Interroll companies in North America (USA and Canada) led to one time costs and a decrease of the operating profit. EBITDA decreased by 14.9% to CHF 18.2 million (previous year: CHF 21.4 million). EBIT decreased by 32.8% and reached CHF 8.8 million (previous year: CHF 13.1 million). Increased amortisation compared to previous year results from the increased number of entities working with the ERP platform SAP and the acquisition of patents and customer values related to the Portec acquisition.

Financing result and income tax expense Net financial expenses of CHF 0.2 million include net financial interest expenses as well as foreign exchange losses. Net financial income of CHF 0.4 million include net financial interest income and foreign currency valuation effects. Due to its decentralised structure, the Interroll Group is generally not much exposed to currency fluctuations.

Financial result and income tax expense Income tax expense is recognised based upon the best estimates of the weighted average annual income tax rate for the full financial year. The tax rate presented in the interim report generally contains tax recov- eries / adjustment charges from previous years. It is also influenced by distinguished assessment of future realisable losses carried forward. In the period under review tax charges resulting from previous periods were incurred of CHF 1.1 million (previous year: CHF 0.5 million).

Result The net profit presented for the reporting period amounts to CHF 7.1 million (previous year: CHF 10.5 million).

24 INTERROLL GROUP NOTES TO THE CONSOLIDATED FINANCIAL INTERIM STATEMENTS

2.5 NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

Cash flow from operating activities The cash flow from operating activities amounts to CHF 5.0 million (previous year: CHF 17.6 million).

Cash flow from investing activities For investments into buildings, machinery and the SAP ERP system CHF 6.2 million were spent before the sale of certain business activities in the USA, compared to net CHF 5.9 million last year. At 28 February 2014 the business activities of Interroll Dynamic Storage Inc. in Hiram/Atlanta (USA) were sold for USD 1.1 million to the local management. The net profit from this business was not material on the Interroll group results.

Cash flow from financing activities The payment from reserves from capital contribution for the net amount of CHF 7.5 million was processed on 17 May 2014 and is therefore included in the cash flow statement.

2.6 NOTES TO THE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Capital contributions The decision of the ordinary general shareholder meeting from 9 May 2014 to distribute CHF 8.80 per share from reserves from capital contributions was executed on 17 May 2014.

Assignment of shares Shares assigned to members of the management in the amount of CHF 0.9 million (previous year: CHF 0.9 million) were expensed.

25 NOTES TO THE CONSOLIDATED FINANCIAL INTERIM STATEMENTS INTERROLL GROUP

3 FURTHER DISCLOSURES AND INFORMATION

Events after the balance sheet date, seasonality The Group did not identify any events after the closing date of the interim statement that would have a material effect on the presentation of its financial position as at 30 June 2014. There are no other facts which require disclosure according to IAS 34.

The industry in which the Group operates does not have significant seasonal variations. However, the current difficult economical environment could have an impact on the short-term profitability.

Changes to the scope of consolidation in July 2014

Acquisitions On 2 July 2014, the purchase agreement to acquire a 40 % minority of Portec Asia in Hong Kong and at the beginning of August 2014 the purchase agreement to acquire a 100 % stake in Pert Engineering in Shenzhen (PRC) became effective. Interroll thus has new 100 % on the sales company for belt curves in Hong Kong. The manufacturing company in Shenzhen is one of the industry’s leading belt curve manufacturers in Asia- Pacific, in particular for airports, distribution centers, as well as courier and postal services. Portec Asia was fully consolidated due to a 60 % majority stake of Interroll since July 2013. Pert Engineering achieved sales of approximately USD 4 million in 2013. Previous owner of the mentioned companies was the Pert Group, headquartered in Hong Kong. The purchase price for the 40 % minority of Portec Asia and the 100 % stake in Shenzhen Pert together is USD 2.6 million. The Interroll Group is currently in the process to prepare the opening balance and the purchase price allocation. Therefore, the Group does not disclose the opening balance and purchase price allocation for the mid-year report.

Contingent liabilities There were no contingent liabilities in the period under review.

26 FINANZKALENDER | KONTAKT

FINANCIAL CALENDAR 2015

Preliminary Financial Figures 2014 23 January 2015

Publication Annual Report 2014 and Balance Sheet Press Conference 20 March 2015

Annual General Assembly 8 May 2015

Publication Half-Year Report 2015 7 August 2015

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Editor: If you have any questions regarding Interroll Holding Ltd. Interroll Group or would like to be in- Via Gorelle 3 cluded in our distribution list, please 6592 Sant’Antonino, Switzerland contact the Investor Relations Team: Phone: +41 91 850 25 25 Fax: +41 91 850 25 05 [email protected]

Concept and design: Petra Müller Interroll (Schweiz) AG Head of PR & Investor Relations Phone: +41 91 850 25 21 Layout & DTP financial section: E-Mail: [email protected] Mondays Modern Media, Steinhausen (CH)

Note on the half year report This half year report is also available in German. If there are differences between the two, the German version takes priority.

Note on rounding Please note that slight differences may arise as a result of the use of rounded amounts and percentages.

Forward-looking statements This half year report contains certain future-oriented statements. Future-oriented statements include all statements which do not relate to historical facts and events and contain future-oriented expressions such as “believe”, “estimate”, “assume”, “expect”, “forecast”, “intend”, “could” or “should” or expressions of a similar kind. Such future-oriented statements are subject to risks and uncertainties since they relate to future events and are based on the company’s current assumptions, which may not in the future take place or be fulfilled as expected. The company points out that such future-oriented statements provide no guarantee for the future and that the actual events including the financial position and profitability of the Interroll Group and developments in the economic and regulatory fundamentals may vary substantially (particularly on the down side) from those explicitly or implicitly assumed in these statements. Even if the actual assets for the Interroll Group, including its financial position and profitability and the economic and regulatory fundamentals, are in accordance with such future-oriented statements in this half year report, no guarantee can be given that this will continue to be the case in the future.

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